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  3. Study Set
    Survey of Economics Principles
  4. Exam
    Exam 9: Imperfect Information, External Benefits, and External Costs
  5. Question
    It Has Been Said That If Buyers of Used Goods
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It Has Been Said That If Buyers of Used Goods

Question 258

Question 258

Essay

It has been said that if buyers of used goods are pessimistic it becomes a self-fulfilling prophecy. In other words, buyer pessimism causes the market to have more low-quality goods. Explain why this is TRUE.

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The more pessimistic buyers are, the low...

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